Suppose the Face Amount of a Promissory Note Is $1,000,000

question 19

Multiple Choice

Suppose the face amount of a promissory note is $1,000,000 and the importer's bank charges an acceptance commission of 1.5 percent. The note is for 60 days. Calculate the amount of the acceptance commission that the bank will charge.

• A)$997,500
• B)$15,000 = $1,000,000 × (0.015)
• C)$2,500
• D)None of the above

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Definitions:

Income Program

A government or institutional initiative designed to provide monetary assistance to individuals or families in need.

Forced-Savings Program

A government or employer initiative requiring individuals to save a portion of their income to foster economic stability or for future use.

Payroll Tax

A payroll tax is a tax imposed on both employers and employees; it is based on wages that employers pay their staff.

Nominal Wages

Are the amounts paid to employees in current dollar terms, without adjusting for inflation or purchasing power.